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By Virginia Furness
LONDON – A JPMorgan executive expressed on Tuesday that the fear surrounding political opposition to environmental, social, and governance (ESG) issues in the United States is exaggerated and is not significantly impacting the nation’s growing green economy.
Chuka Umunna, JPMorgan’s global head of sustainable solutions, highlighted during the Reuters Energy Transition conference that although some companies and investors may be less vocal about their sustainability efforts, their financial activities remain consistent with those of their European counterparts.
"If you strip away the distractions and focus on actual investment behaviors, there isn’t a substantial difference," Umunna stated, noting that while terminologies may differ from Europe, the underlying actions are similar. "The U.S. is not necessarily retreating due to the politicization of ESG; the situation is more nuanced."
Several U.S.-based investors, including JPMorgan’s investment fund, have distanced themselves from global climate coalitions this year amid a charged political climate, with some Republican politicians suggesting that participation could violate antitrust laws.
Despite the rise in anti-ESG resolutions during the latest proxy-voting season, Umunna pointed out that fewer than 2% of these proposals were actually approved. Additionally, at the state level, less than 10% of anti-ESG bills were enacted.
While funds aiming to attract investments in Republican-led states might adjust their messaging, Umunna observed that the large global clients of the bank’s fund division typically adhere to a unified investment stewardship policy worldwide.
For companies in the U.S. seeking capital or loans, Umunna asserted that their more pressing challenges stem from inflation, supply-chain disruptions, and elevated interest rates.
"Is all the noise affecting valuations? I’m not sure it is," he remarked. "I believe there are more fundamental issues at work."
